The American Kidney Fund® (AKF), whose Health Insurance Premium Program (HIPP) helps pay insurance premiums for 80,000 people who have end-stage renal disease (ESRD) and need kidney dialysis treatment, categorically denied the accusations contained in a New York Times article that it resists giving aid to patients at dialysis clinics that do not donate money to AKF.

Background

According to the New York Times article, in 1995, AKF had a $5 million annual budget and contributions from the dialysis industry accounted for less than 10 percent of its donations. In 1997, however, AKF obtained an advisory opinion from the HHS Office of Inspector General (OIG) that allowed dialysis clinics treating Medicare and Medigap patients to make charitable donations to AKF to fund its HIPP without incurring civil money penalties under section 231(h) of the Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191). Section 231(h) prohibits payments to or on behalf of a federal health care program beneficiaries if the payments are likely to influence such beneficiaries to use a particular provider. The OIG advisory opinion found that AKF’s payment of premiums on behalf of financially needy beneficiaries was not likely to influence a beneficiary’s selection of a particular provider and would be allowed.

The Times reported that this 1997 OIG advisory opinion opened the floodgates for charitable donations to AKF, resulting in a 2015 revenue of $264 million.

Accusations

The Times article described multiple cases where AKF allegedly pushed back on dialysis clinics that had not donated money, discouraging them from signing up their financially needy patients for assistance from the HIPP fund. The article also alleged that, until recently, AKF guidelines actually stated that clinics should not apply for patient aid if the clinic had not donated to the charity.

The article further alleged that in some cases, according to insurers and government officials, dialysis clinics used the HIPP fund to push Medicaid eligible people into private health insurance coverage through the health insurance exchanges, which can pay up to four times more than Medicaid for the same treatment. In fact, UnitedHealthcare of Florida, Inc. sued one dialysis clinic, American Renal Associates, for this practice, alleging that it is harming patients by moving them into less generous coverage. The lawsuit, filed in federal district court in Florida, also alleges that AKF directed some charitable donations directly back to patients at American Renal Associates.

In response to the investigation, AKF’s chief executive, LaVarne A. Burton, told the Times that “nearly 40 percent of the 213 dialysis companies whose clinics had successfully helped patients apply to the [HIPP] fund had never donated.” The Times noted, however, that Burton would not tell them “what percentage of the 80,000 patients the HIPP fund helps annually comes from clinics that do not donate, or how many of those patients come from the biggest companies, which donate most of their revenue.”

AKF response

AKF responded to the Times article with a press release posted on its website. The press release stated that the Times article “presented a factually incorrect and unfair picture of AKF” and emphasized the following points:

AKF asks all providers to contribute to HIPP—but it never requires it. If a clinic choses to donate, the donation goes into one funding pool. From that pool, grants are awarded to patients on a first- come, first-served basis. Patients can change dialysis clinics at any time and the grant follows the patient.

AKF has never turned away a patient who is financially qualified to receive a grant, and it never will, regardless of whether their provider donated to AKF.

AKF never conditions the issuing of grants on whether a provider contributed to AKF, and fully 40 percent of dialysis providers with patients receiving help from AKF do not contribute anything to AKF.

There is no “earmarking” of donations by AKF. Donations from a dialysis clinic go into a funding pool and are not used only for that clinics patients.

HIPP has firewalls in place to protect the integrity of the program. AKF’s funding staff does not have access to revenue data, i.e., they do not know whether a patient who is applying for assistance is treated at a clinic that donated to AKF.

AKF further explained that, when HIPP entered a period of instability five years ago, it embarked on an effort to educate providers about the need to contribute to the fund if the program was to continue. However, regardless of whether providers contributed, it claims that it has always continued to assist their patients. AKF expressed regret if their educational communications with providers lead them to believe that they would only assist the patients of donor facilities.

AKF also stated that it revised its HIPP guidelines to remove language in which it asked providers to donate because it does not want there to be any confusion over whether the contributions are voluntary. It also indicated that it developed a new patient-facing HIPP brochure that emphasizes that patients can receive HIPP assistance no matter where they have dialysis treatment.